The appointment of the chairman of Japan’s publicly funded broadcaster to the board of Tokyo Electric Power Co. has raised concerns about its unbiased reporting on the utility and a possible conflict of interest.
The appointment of the chairman of Japan’s publicly funded broadcaster to the board of Tokyo Electric Power Co. has raised concerns about its unbiased reporting on the utility and a possible conflict of interest.
TEPCO on May 14 reported a fiscal 2011 net loss of 782 billion yen ($9.76 billion), its second consecutive loss, and announced a new 11-member board tasked with rebuilding its operations.
Six board members will be drawn from outside TEPCO, including Fumio Sudo, chairman of the board of governors of Japan Broadcasting Corp. (NHK).
Sudo, 71, former president of steelmaker JFE Holdings Inc., denied any conflict of interest between the two positions.
“I decided to take the job because Japan is facing a national crisis,” he told reporters. “All I can is to do my best within the scope (of responsibilities) for TEPCO and NHK, respectively, defined by law. I cannot possibly say something beyond those boundaries.”
An official at the secretariat for the NHK board of governors also said a governor’s job outside NHK will not affect its reporting, noting that governors are prohibited from interfering with the content of individual programming under law.
Still, a senior NHK official said Sudo’s appointment might raise concerns among viewers about its reporting.
“Why will a top executive of a media organization now join TEPCO, the most important subject of media coverage, among all possible organizations?” the official asked.
TEPCO is saddled with key issues, from unpopular rate increases and opposition to restarting nuclear reactors, to compensation for victims of the accident at the Fukushima No. 1 nuclear power plant.
Yoshihiro Oto, a professor at Sophia University specializing in the media, said Sudo must explain the process in which he decided to accept the position at TEPCO.
“It will be problematic if the public believes that NHK’s coverage is biased,” he said.
TEPCO will appoint the new directors after approval at a shareholders meeting on June 27.
The government will take the lead in trying to turn around TEPCO’s operations by investing 1 trillion yen in the embattled utility through the Nuclear Damage Liability Facilitation Fund in July.
TEPCO will effectively come under state control as the government acquires a majority of voting rights in the company.
Five other outside directors will be Kazuhiko Shimokobe, chairman of the fund’s steering committee; Yoshimitsu Kobayashi, president of Mitsubishi Chemical Holdings Corp.; Yoshiaki Fujimori, president of JS Group Corp.; certified public accountant Takao Kashitani; and Kimikazu Noumi, president of the Innovation Network Corp. of Japan.
Shimokobe will serve as chairman, while Naomi Hirose, currently a managing director, will be promoted to president.
The new board will face tough challenges, particularly compensation over the nuclear disaster and decommissioning of the crippled reactors at the Fukushima No. 1 plant.
According to the announcement on May 14, TEPCO is projecting a third consecutive net loss of 100 billion yen for the current fiscal year. The fiscal 2011 loss of 782 billion yen compares with 1.25 trillion yen in net losses the previous year.
The company set aside 633 billion yen in fiscal 2010 for dealing with the nuclear accident in the future and nearly 300 billion yen more in fiscal 2011.